PE

PE is a ratio between price and earning per share (EPS).

E.g. SingTel's EPS is 0.249. It's share price is S$2.5.

Therefore SingTel's EP = 2.5/0.249 = 10.04.

Similary, EP for:
- Starhub = 1.95/0.187 = 10.43
- M1 = 1.50/0.192 = 7.81

You would notice that PEs for both SingTel and Starhub are around 10 point something whereas M1 is lower by almost 22% [(10-7.8)/10)] against standard in telecommunication industry.

If we use 10 as the PE for M1, share price of M1 would have been $1.92 (10x0.192) by now.

有何意义

PE is one of the important indicators for examining if you have bought a share at a right price based on industrial standard. This is based on assumption that PE ratio should be the same for businesses in the same industry.

PE is also useful indicator for share price projection. For example, a new company may have generated good net profit and we can use PE of its competitors to project the new company's future target share price.

In the above examples, we would interpret that either M1's may have been under priced or the others' may have been over priced.